Listen to the audio pronunciation in the Cambridge English Dictionary. A trough is the stage of the economy's business cycle that marks the end of a period of declining business activity and the transition to expansion. The Great Depression (1929-39) was the longest lasting and deepest economic depression in the history of the modern industrial world. trough pronunciation. b. In economics, a trough is a low turning point or a local minimum of a business cycle. Trough Definition A trough, in economic terms, can refer to a stage in the business cycle where activity is bottoming, or where prices are bottoming, before a rise. The business cycle is the upward and downward movement of gross domestic product (GDP) and consists of recessions and expansions that end in peaks and troughs. An economic trough occurred in June 2009. The business cycle depicts the increase and decrease in production output of goods and services in an economy. A long, narrow depression, as between waves or ridges. Trough. A gutter under the edge of a roof for carrying off rainwater. The business cycle's four phases can be so severe that they’re also called the boom and bust cycle. An economic trough is when economic activity hits a low point in its down cycle. A trough, in economic terms, can refer to a stage in the business cycle where activity is bottoming, or where prices are bottoming, before a rise. The business cycle is the upward and downward movement of gross domestic product and consists of recessions and expansions that end in peaks and troughs. 3. Contraction: A slowdown in the pace of economic activity defined by low or stagnant growth, high unemployment, and declining prices. Employment levels also offer an indicator of where the economy stands in the business cycle. From a conceptual perspective, the business cycle is the upward and downward movements of levels of GDP (gross domestic product) and refers to the period of expansions and contractions in the level of economic activities (business fluctuations) around a long-term growth trend. The time evolution of many variables of economics exhibit a wave like behavior with local maxima (peaks) followed by local minima (troughs). A simple definition: A fall in real GDP for two consecutive quarters i.e. A long, narrow depression, as between waves or ridges. In addition, in trough phase, there is a rapid decline in national income and expenditure. In economics, a trough is a low turning point or a local minimum of a business cycle. Technical traders also sometimes refer to swing lows as troughs, and swing highs as peaks. Learn more. A long, narrow, generally shallow receptacle for holding water or feed for animals. It is only once the economic activity begins to increase again, as shown on economic indicators, that expansion is likely underway and the trough (or bottom) has been put in. At the end of 2007, the U.S. GDP reached an all-time high of $14.99 trillion. 3. A trough, in economic terms, can refer to a stage in the business cycle where activity is bottoming, or where prices are bottoming, before a rise. Troughs are recognizable in hindsight, but harder to spot in real-time. An economic recovery is a business cycle stage following a recession that is characterized by a sustained period of improving business activity. Business cycles are identified as having four distinct phases: expansion, peak, contraction, and trough. Find more ways to say trough, along with related words, antonyms and example phrases at Thesaurus.com, the world's most trusted free thesaurus. 2. The economy will then begin to contract as it slides down the backside of the peak and goes into recession. Have a definition for Trough (economics) ? As the economic indicators contract, the economy is in a contraction phase. Troughs usually signify that economic decline has now turned in the opposite direction, and the economy is either growing or expanding. In a recession, the point of the most negative GDP growth that immediately precedes the beginning of recovery.In other words, it is the lowest point in a business cycle.The term comes from charting, in which the x-axis represents time and the y-axis represents GDP growth.In this situation, the low point of a business cycle looks like a trough or pit. six months; A more detailed definition: A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real … Consumer discretionary is an economic sector comprising non-essential products that individuals may only purchase when they have excess cash. Figure 1. The trough is the bottoming process of moving from contraction, or declining business activity, to recovery, which is increasing business activity. 4. Examples of trough in the following topics: The Business Cycle: Definition and Phases. Declines in the stock market coincide or foreshadow contraction in the economy. Economists use several metrics to track the economic cycle throughout its various phases. Listen to the audio pronunciation in English. In this phase, the growth rate of an economy becomes negative. 4. The period marked from trough to peak. Trough (Economy) Definition. Troughs are important as they mark a positive turning point for the economy. The good thing about a trough, however, is that it is a turning point, a turning point to an expansion. Back to: ECONOMIC ANALYSIS & MONETARY POLICY. During the U.S. recession of the early 1990s, the trough occurred in March 1991. ; The slowing ceases at the trough and at this point the economy has hit a bottom from which the next phase of expansion and contraction will emerge. A contraction is a phase of the business cycle where a country's real gross domestic product (GDP) has declined for two or more consecutive quarters, moving from a peak to a trough. In June 2009, it bottomed out at $14.36 trillion. The trough is the fourth phase. Term trough Definition: The transition of a business cycle from a contraction and an expansion. The end of a contraction carries the descriptive term trough. It sent Wall Street into a panic. This revision note looks at trend or long term growth in an economy. A trough is a low point in a process that has regular high and low points, for example a period in business when people do not produce as much as usual. trough /trɒf $ trɒːf/ noun [ countable] 1 container a long narrow open container that holds water or food for animals a horse trough 2 low point a short period of low activity, low prices etc OPP peak trough of The graph showed peaks and troughs of activity. These increase during expansion, recede during contraction, and bottom out during a trough. 2. The offers that appear in this table are from partnerships from which Investopedia receives compensation. Contraction. The economy is in a trough right now. Looking back afterwards you will see that this was not a terminal trough in your career. Incomes and wages are also indicators for where the economy stands in the business cycle. The recovery to this recession, marked by the ensuing expansionary phase, was robust, with the GDP surpassing $9 trillion for the first time ever before the end of 1991. Economists say that the business cycle goes through four main stages: 1. In non-business English, a trough can mean: 1. The time evolution of many variables of economics exhibit a wave like behavior with local maxima (peaks) followed by local minima (troughs). [3], Learn how and when to remove this template message, https://en.wikipedia.org/w/index.php?title=Trough_(economics)&oldid=980701826, Articles with too few wikilinks from January 2019, Articles covered by WikiProject Wikify from January 2019, All articles covered by WikiProject Wikify, Articles needing additional references from April 2017, All articles needing additional references, Creative Commons Attribution-ShareAlike License, This page was last edited on 27 September 2020, at 23:17. 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